Considering investing in real estate in the Netherlands? When is the best time to buy? What steps should you take? What are the real estate prices like? This article answers all your questions.
The Netherlands, especially Amsterdam, is attractive for its quality of life and charm. To live in the Netherlands and enjoy this environment, you have two options: rent an apartment or buy property.
Should You Buy or Rent?
A simple rule can help with this decision. If you plan to live in the Netherlands for more than five years and your rent exceeds €1,250 per month, buying property might be more advantageous. High transaction costs and rapid market changes make buying more appealing in this scenario. However, this rule isn’t absolute since other factors like higher real estate prices in the capital can influence the decision. Generally, expats are advised to rent for stays of three years or less.
Planning to Stay Over Five Years? Buying is Better!
It’s highly recommended to buy property if you plan to live in the Netherlands for more than five years. Beyond this period, rental costs and rising market prices make buying more beneficial than renting.
The Dutch Real Estate Market
In most of the country, real estate demand exceeds supply, impacting prices and the complexity of purchasing. It’s common in the Netherlands for a multi-story house to be occupied by different families on each floor due to a shortage of land and relatively few houses compared to the rest of Europe.
How to Buy Property: Who to Contact?
Most expats looking to buy property in the Netherlands go through a real estate agent. An agent provides expertise and guidance during your property search and the purchasing process. Besides advising on properties and neighborhoods, they can negotiate with the seller and notary on your behalf and act as a translator during your search.
In the Netherlands, you need to sign a contract with the real estate agent. Fees typically range from 1.5% to 2% of the property purchase price. Be aware that the contract may require you to pay the agent’s fees even if you decide not to buy or find a property on your own.
Real Estate Agents and Listing Websites
There are various ways to find housing in the Netherlands. The simplest is to consult real estate agencies to see available listings. These agencies offer professional expertise and advice, which is valuable when moving to a foreign country. Here’s a non-exhaustive list of real estate agencies in the Netherlands:
To get an overview of the market, you can first check listing websites that feature properties managed by multiple agencies. Here are some listing websites:
The Buying Process
After finding the property you want to buy, you can start negotiations with the seller. It’s crucial to have already contacted credit institutions during negotiations to ensure you can get a loan and know the maximum amount you can borrow.
Once the buyer and seller agree on the price (usually through their respective agents), a preliminary sale agreement (koopovereenkomst) is signed. Next, you select a notary (notaris) who holds the contract and a 10% down payment. The final sale contract (akte van levering) is then signed, and the notary registers the property transfer with the land registry (kadaster).
Buying an Apartment: Specific Considerations
When you buy an apartment, you own a share of the building or land. Each building is managed by an owners’ association called Vereniging van Eigenaren (VvE), responsible for common area maintenance and repairs. These associations can incur debts or even go bankrupt. As a member, you’ll be responsible for your share of any debt, so it’s essential to check the VvE’s financial health before purchasing.
Read the Preliminary Sale Contract Carefully
The preliminary sale contract (koopovereenkomst) should include all standard details, such as property specifics, benefits, and charges. Additionally, ensure it contains:
- A safeguard clause in case you don’t obtain a loan
- Safeguard clauses if the other party decides not to complete the sale
- A detailed list of included appliances and furniture if applicable
After signing the contract, a legal 72-hour cooling-off period allows you to withdraw without penalty. Once this period expires, the preliminary sale contract forms the basis of the final sale contract (akte van levering).
A Notary is Mandatory
Dutch law requires property registration by a notary. Notary fees are around 7%, plus 6% transfer fees, and another 6% for file and registration costs. A sworn translator must attend meetings with the notary if at least one party is not a Dutch citizen. Booking in advance is necessary, and translator fees are around €200.
For more information on notaries in the Netherlands, visit the Royal Dutch Association of Notaries website (de Koninklijke Notariële Beroepsorganisatie).
Include Acquisition Costs in Your Budget
Budget approximately 6% of the purchase price for fees and charges, including:
- Transfer tax (overdrachtsbelasting), currently 2%
- Legal fees
- Registration fees, 1-1.5%
- Real estate agent fees, 1-2%
Getting a Mortgage
There are no restrictions for non-Dutch citizens obtaining a mortgage. Generally, you can borrow up to five times your gross salary. In the Netherlands, loan applications are processed after the buyer’s offer is accepted by the seller. However, ensure you understand your borrowing options and possibilities by contacting credit institutions beforehand. You can get quotes from banks before signing the sale contract to ensure you can finance your project.
Mortgages can be arranged directly with lenders (usually major banks) or through mortgage brokers (hypotheek makelaar) or advisors (de hypotheekadviseur). Several agencies offer services specifically for expats, such as Finsens advisory agency.
The four largest mortgage lenders are:
Finally, buying property in the Netherlands is similar to buying a new car from a dealership. When you make the purchase, you handle insurance and financing as well.
Considering renting instead? Check out our article on rental housing in the Netherlands.
